The product of the oncogene v-src, a phosphoprotein (pp60src) with tyrosine-specific kinase activity, is responsiblef or transformation of cells by Rous sarcoma virus (RSV). An immortal cell line (10W) isolated after treatment of Syrian hamster embryo (SHE) cells with asbestos, was cotransfected with pSV2-neo DNA and RSV DNA which encodes the v-src oncogene. Neo-R 10W RSV cell clones contained multiple copies of the RSV genome, but failed to express v-src RNA or pp60src. Most of these clones were not morphologically transformed and failed to grow in soft agar. Three neo-R RSV clones were tumorigenic with latency periods of three weeks. Tumor-derived cell lines from these clones expressed high levels of v-src RNA and protein. This increased expression was associated with an approximately ten-fold amplification in RSV DNA sequences and the appearance of double minute chromosomes. Our results suggest that gene amplification alters the expression of the v-src gene in these cells. The mechanism of v-src transformation was compared to the mechanism of another viral oncogene, v-Ha-ras. Cell lines containing either the v-src gene or the v-Ha-ras gene were analyzed following treatment with retinoic acid. The transformed phenotype was inhibited in cells transformed with the v-src oncogene, whereas retinoic acid stimulated parameters of transformation in v-HA-ras transformed cells. The different effect of retinoic acid on the cells was not due to alterations in the synthesis of the oncogene products. Further studies will use retinoic acid to identify critical cellular targets for the v-src and the v-Ha-ras proteins.